Mandated Paid Safe Days

Protect employeesThere are many unanticipated, unfair reasons why employees miss work and suffer lost pay, lost opportunities, and even disciplinary action. There are an equal number of emotionally compelling reasons to protect employees in these instances. But does that mean employers should be required to provide protection?

In the cases of serious health conditions for immediate family members, employee disabilities, and society’s military needs, for example, the question has been answered in the affirmative. We have national laws (and in many instances state laws) to address these situations. But what about mandated paid leave for something perhaps more difficult to determine with particularity: instances of domestic violence?

The Seattle City Council has passed a new ordinance requiring among other things that businesses operating within the City and that have 5 or more employees provide paid “safe days” to employees in the City who are victims of domestic violence. The ordinance goes into effect in September 2012.

The amount of paid leave is set on a scale depending on an employer’s size. Smaller employers with 5 to 249 employees are required to grant 56 hours of paid leave. Employers with 250 or more employees must provide 72 hours of paid leave. An employer’s employees are counted for purposes of determining eligibility whether or not the employees work within the City.

An employer with leave policies that provide at least the requisite levels of paid leave generally will satisfy the ordinance if the employer permits use of the leave for instances of domestic violence.

Other urban municipalities are expected to follow Seattle’s lead. But as goes the West Coast, so goes the rest of the nation? Doubtful.

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McKinney Rule for Removal To Federal Court Rejected by Fourth Circuit

The Fourth Circuit has now joined the Sixth, Eighth and Eleventh Circuits in adopting a last served defendant rule to govern the timing of filing a petition for removal from state court to federal court in cases involving multiple defendants. The case is Barbour v. International Union, 1:08-cv-01076-AMD, decided on February 4, 2010.

The statutory authority for removal to federal court is found in 28 U.S.C. § 1446(b) which states:

“The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.”

The rule does not specifically address a situation where multiple defendants are named and, as almost always occurs, are served on different days. The Fourth Circuit, in the case of McKinney v. Bd. of Tr. of Mayland Cmty. Coll., 955 F.2d 924 (4th Cir. 1992) addressed the situation in a footnote which has become known as the McKinney rule. That footnote read:

” [W]here B is served more than 30 days after A is served, two timing issues can arise, and the law is settled as to each. First, if A petitions for removal within 30 days, the case may be removed, and B can either join in the petition or move for remand. See 28 U.S.C. § 1448. Second, if A does not petition for removal within 30 days, the case may not be removed.”

Some have read the foregoing language as requiring the first served defendant to have filed a petition for removal within thirty days of being served otherwise removal by all later served defendants is barred. While many district courts in the Fourth Circuit contended that the McKinney rule was dicta and not controlling, it has been a source of confusion and uncertainty for practitioners.

The Court’s opinion, written by Judge Agee, discusses the inequity visited upon the later served defendants due to the application of the McKinney rule.

“[N]either § 1446(a) nor § 1446(b) contemplates a scenario in which defendants are served as much as thirty days apart, or in which an unsophisticated defendant is served first and a more sophisticated defendant is served later. In these instances, the second-served defendant should be able to timely remove and persuade the first-served defendant to join the removal. Otherwise, the first-served defendant abridges the second-served defendant’s procedural right to a federal forum. If the first-served defendant makes a conscious choice not to remove, the second-served defendant has to accept that choice. But the second-served defendant should have a reasonable opportunity to consult with the first served defendant regarding possible removal. Consultation is practically impossible if service on the second defendant occurs near the end of or after the first defendant’s thirty-day removal period has expired.”

Fourth Circuit

“[T]he McKinney rule only requires every defendant to act if every preceding defendant acted; if the first-served defendant was dilatory, the remaining defendants cannot act at all.”

The Barbour Court held in conclusion:

“[W]e believe the so-called “McKinney rule” is based on non-binding dicta and the Supreme Court’s opinion in Murphy Brothers counsels a different result. We therefore join the Sixth, Eighth and Eleventh Circuits in adopting the last-served defendant rule and hold that in cases involving multiple defendants, each defendant, once served with formal process, has thirty days to file a notice of removal pursuant to 28 U.S.C. § 1446(b) in which earlier-served defendants may join regardless of whether they have previously filed a notice of removal.”

It appears that practitioners in the Fourth Circuit now have clearer guidance on the timing for removal of a state court action to federal court.

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Fourth Circuit affirms enforceability of “pay-when-paid” clause

pay-when-paidIn its February 19 ruling in Universal Concrete Products Corp. v. Turner Const. Co., the Fourth Circuit once again confirmed the well-established Virginia rule that “pay-when-paid” clauses are enforceable in construction agreements in the absence of clear contractual ambiguity. In Universal Concrete, the Subcontractor unsuccessfully argued to the District Court on summary judgment that an ambiguity existed regarding payment by virtue of language in the AIA contract between the Owner and Turner. The District Court disagreed and the Fourth Circuit affirmed. The Fourth Court found that Turner had no obligation to pay its Subcontractor where the contract had made payment by the Owner an unambiguous condition precedent. The Court further found that clauses in the Owner/Turner contract actually supported rather than defeated this payment timing. In so ruling, the Court reiterated the Virginia policy preference for “freedom to contract” over any paternalistic preference for the perceived weaker contracting party.

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